Stock levels crept up for a second consecutive month, according to lettings agency Hamptons, meaning there were 15 per cent more homes available to rent in October 2022 than in October 2021.  

However, this increase compares to a period when stock levels were at record lows and there are still 47 per cent fewer homes available than two-years ago.     

London is now the only region where there are fewer homes available to rent than last year.  

This coincides with an 11 per cent year-on-year increase in rents, driven by Inner London’s recovery where rents rose 27 per cent year-on-year.

Aneisha Beveridge, head of research at Hamptons, says: “Strong rental growth has pushed average rents into another £100 price bracket for the third time in just over two years.  However, the good news for tenants is that rental growth has slowed from its summer double-digit peak and looks likely to settle around the five to six per cent mark by the end of the year.  

“This will be welcome news for many households who are seeing other costs spiral as inflation peaks. And it also means that, unlike at the beginning of the year, rents are more closely tracking income growth which should soften the cost of living squeeze for tenants.

“While the risks are mounting for future house price growth, these same risks are likely to bolster rental growth in the short-term.  

“High mortgage rates will keep more would-be buyers in the rental market for longer, which is partly why demand is up five per cent won last year’s record levels.  

“The cost of servicing a 90 per cent LTV mortgage has risen 65 per cent over the last year, meaning tenants are now spending a similar proportion of their income on rent (44 per cent)as they would on a mortgage (36 per cent). 

“Landlords’ costs are also rising, which they’ll likely seek to pass onto tenants in the form of higher rents or sell up if they are unable to cover costs.  This is why we think rents are still likely to rise five per cent in 2023.”